Press release from the office of Texas Attorney General Greg Abbott
AUSTIN Ã¯Â¿Â½ Attorney General Greg Abbott reached the second settlement this month that protects auto credit insurance purchasers. The $6.5 million settlement with American National Insurance Co. of Galveston provides an average of $313 in premium refunds to more than 17,000 Texas vehicle owners.
"Vendors who benefit from doing business in Texas must comply with Texas law," Attorney General Abbott said. "Today's settlement ensures that affected credit insurance purchasers receive the refunds they deserve. The Office of Attorney General will continue aggressively working to protect auto credit insurance purchasers in Texas."
Policies sold by American National cover payments owed to financing institutions in the event the borrower dies or becomes disabled. American National customers bought policies through dealerships at the time they purchased their vehicles. The full cost of the credit insurance policy was bundled into the buyer's vehicle loan. The coverage period lasted through the term of the loan, in some cases as long as six years.
Under the Texas Insurance Code, the company was obligated to refund the unearned portion of the insurance premiums to those customers who paid off their loans ahead of schedule. American National, however, retained the unearned premiums from customers who paid off their loans early between 2002 and 2006.
The Attorney General has taken legal action against several credit insurance companies. Earlier this month, Enterprise Life Insurance Co. of Irving was the first company to settle with the Attorney General and offer refunds to eligible customers.
American National Life Insurance Co., the largest life insurance company domiciled in Texas, will make settlement information available within 30 days on its Web site at www.anico.com. Consumers may also speak to American National about the settlement at (800) 899-6502, or call the Office of Attorney General toll-free at (800) 252-8011.